9 High-Yield Stocks to Consider in Lieu of Bonds

BOSTON ( TheStreet) -- Investors seeking the security of Treasury bonds in fear that Europe's ongoing economic woes will spread are getting the lowest yields on the 10-year note in almost 70 years.

But those investors are missing out on much more attractive alternatives that don't have a significantly higher degree of risk.

They are high-yielding stocks of top-notch companies that have a good chance for share-price appreciation when the market regains its equilibrium.

In order to find some of the best of them, I screened the Morningstar database for high-yielding stocks of companies with market values of at least $5 billion and financial fundamentals that put them among the best in their industry, which means their futures are sound.

I found five in this elite group with dividend yields more than three times that of the record low 1.53% rate being paid by the 10-year Treasury on Thursday and four others that are paying better than 4%.

One shining example is Southern Copper ( SCCO), a copper producer with the world's largest mine reserves.

Its shares currently yield 7.06% and have returned 32% annually on average over the past decade. Sure, the metals market, along with Southern Copper's shares, are on a constant roller-coaster ride, but given that this company had $1.4 billion in cash versus only $2.7 billion in debt at the end of 2011, it's in a lot better financial shape than many European countries right now.

Two other interesting picks are from Canada, a nation that has weathered the recession in better shape than the U.S. due to the fiscal conservatism of its banking system.

One, Rogers Communications ( RCI), with a yield of 4.21%, is Canada's largest wireless voice and data communications services provider as well as its biggest cable television provider, this in a country that is several years behind the U.S. in terms of cell phone and cable TV penetration rates. So it has plenty of room for growth.

Rogers' bonds get investment-grade ratings and last year it repurchased about 31 million shares under a buyback plan that is still in force this year.

Another winner from up north is a young real estate investment trust (REIT), Riocan Real Estate Investment ( RIOCF), Canada's biggest retail REIT. It owns and manages shopping centers.

It's in a great position for growth as the struggling Sears Canada ( SEARF) is expected to sell off some of its plum store locations, just as U.S. retailers, such as mass market retailer Target ( TGT) and upscale clothier Nordstrom ( JWN), are keen to enter Canadian urban markets.

Here are summaries of nine, high-quality companies' stocks with current dividend yields over 4% and positive long-term prospects arranged in inverse order of dividend yield:

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